Câu hỏi đánh giá môn Kinh tế vĩ mô bằng tiếng Anh- Chương 4

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Câu hỏi đánh giá môn Kinh tế vĩ mô bằng tiếng Anh- Chương 4 Chapter 4: Individual and Market Demand Formatted: Font: Times New Roman, 12 pt Formatted: Space Before: 1.2 line, CHAPTER 4 After: 1.2 line, Line spacing: 1.5 lines INDIVIDUAL AND MARKET DEMAND Formatted: Font: Times New Roman Formatted: Font: Times New QUESTIONS FOR REVIEW Roman, 12 pt1. Explain the difference between each of the following terms:a. a price consumption curve and a demand curve; A price consumption curve identifies the utility maximizing combinations of two goods as the price of one of the goods changes. When the price of one of the goods declines, the budget line will pivot outwards, and a new utility maximizing bundle will be chosen. The price consumption curve connects all such bundles. A demand curve is a graphical relationship between the price of a good and the (utility maximizing) quantity demanded of a good, all else the same. Price is plotted on the vertical axis and quantity demanded on the horizontal axis.b. an individual demand curve and a market demand curve; An individual demand curve identifies the (utility maximizing) quantity demanded by one person at any given price of the good. A market demand curve is the sum of the individual demand curves for any given product. At any given price, the market demand curve identifies the quantity demanded by all individuals, all else the same.c. an Engel curve and a demand curve; A demand curve identifies the quantity demanded of a good for any given price, holding income and all else the same. An Engel curve identifies the quantity demanded of a good for any given income, holding prices and all else the same.d. an income effect and a substitution effect; 41 Chapter 4: Individual and Market Demand Formatted: Font: Times New RomanThe substitution effect measures the effect of a change in the price of a good on the consumptionof the good, utility held constant. This change in price changes the slope of the budget line andcauses the consumer to rotate along the current indifference curve. The income effect measuresthe effect of a change in purchasing power (caused by a change in the price of a good) on theconsumption of the good, relative prices held constant. For example, an increase in the price ofgood 1 (on the horizontal axis) will rotate the budget line down along the indifference curve asthe slope of the budget line (the relative price ratio) changes. This is the substitution effect. Thisnew budget line will then shift inwards to reflect the decline in purchasing power caused by the Deleted: This is an expanded version of the old 1¶increase in the price of the good. This is the income effect. a. A price consumption curve identifies what happens to the consumption of both goods as the price of one of the goods changes. A demand curve identifies the2. Suppose that an individual allocates his or her entire budget between two goods, food relationship between the consumption and price of one good. b. The market demand curve is the sum of the individualand clothing. Can both goods be inferior? Explain. demand curves. c. A demand curve ...